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Economic Analysis: Theory and Practice
 

Balanced scorecard and applied strategic analysis in strategic financial management

Vol. 14, Iss. 18, MAY 2015

PDF  Article PDF Version

Available online: 21 May 2015

Subject Heading: THEORY OF ECONOMIC ANALYSIS

JEL Classification: 

Pages: 2-14

Krylov S.I. Ural Federal University named after First President of Russia B.N. Yeltsin, Yekaterinburg, Russian Federation
19016708@rambler.ru

Importance In modern conditions the organization's financial strategy should help achieve a primary business goal, i.e. maximization of its owners' (shareholders') wealth in the long run. Therefore it is relevant to improve an accounting and analytical framework for strategic financial management.
     Objectives The article is of theoretical and methodological nature. It focuses on a possibility of using a balanced scorecard and applied strategic analysis derived from it in strategic financial management.
     Methods The methodology of the research is based on R. Kaplan and D. Norton's concept of the balanced scorecard and conceptual fundamental of the applied strategic analysis I developed earlier.
     Results
When using the balanced scorecard and applied strategic analysis in strategic financial management, a user forms a financial component of the balanced scorecard and analyzes indicators it includes. Balanced Scorecard's financial indicators estimate consequences of activities undertaken and reflect whether the financial strategy and its real implementation correlate as stipulated in the general corporate development plan. To reach a clear understanding of the strategic financial goals, it is advisable to apply no more than two indicators to each of the goals. An analysis of the indicators of the balanced scorecard implies a comprehensive, thorough examination of financial aspects of the entity's business operations and constitutes a comparative evaluation, variance diagnostics and forecast of a financial component.
     Conclusions and Relevance I conclude that, if introduced, the balanced scorecard and applied strategic analysis will make the strategic financial manegement more efficient in the modern market economy.

Keywords: finance, management, balanced scorecard, applied strategic analysis

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